ABSTRACT Adult hepatic stem cells have not been identified in quiescent liver and for this reason not yet isolated. Our long-term research strategy is directed towards identification and isolation of these cells. The progeny of adult hepatic stem cells, adult hepatic progenitor cells (AHPC) named also oval cells (OC) arise from a reserve hepatic compartment and they proliferate and differentiate into hepatocytes and cholangiocytes when the regenerative capacity of terminally differentiated hepatocytes is exhausted or blocked. We study AHPC because they possess important features that can make them valuable for cell and gene therapy: (1) A small number of OC should be able to repopulate the liver;(2) OC are bipotent and can differentiate into both hepatic epithelial cells types;(3) OC could be propagated to expand in vitro and used for multiple transplantations;(4) They could be cryopreserved and used as needed;and (5) OC could be manipulated in vitro for use in gene therapy. Adult hepatocytes do not exhibit these characteristics and our long-term goal is to explore and use OC for cell and gene therapy. In our research, we have made important contributions in the OC field: (1) We have identified and validated novel surface markers and used them for isolation and characterization of OC;(2) Previously, it was believed that OC share some phenotypic characteristics with hematopoietic progenitor cells but our results have shown for the first time that none of these hematopoietic progenitor cell markers are expressed in rat hepatic oval cells;(3) We have shown that OC and Thy-1+ cells are separate cell types that emerge together from the stem cell niche;(4) We have performed gene expression analysis of isolated, pure OC and showed that they display a mixed epithelial/mesenchymal phenotype;and (5) We have demonstrated for the first time that oval cells repopulate a preconditioned rat liver and differentiate in vivo into both hepatocytes and cholangiocytes. We have also identified the major supporter cells in the compartment where AHPC proliferate and differentiate: the mesenchymal cells expressing Thy-1. We have also characterized these cells and found that they produce cytokines and growth factors necessary for the AHPC growth. The goal of this proposal is to understand the nature of Thy-1 expressing cells, how they appear and disappear from the liver and whether they are hepatic mesenchymal progenitor cells with multilineage differentiation capabilities or activated mesenchymal cells. We will study further how OC reserve compartment is activated and what are the specific factors, cytokines and growth factors that trigger their proliferation and how this proliferation is modulated. Such factor/s must be different from normal liver regeneration, as OC do not proliferate in the liver when hepatocyte proliferation is not compromised. These results will assist us in designing best conditions for long-term propagation of OC in culture. Finally, experiments are designed to augment liver repopulation by stimulating oval cells expansion with several cytokines: IL-6, HGF and TWEAK and by inhibiting hepatocyte proliferation. Oval cell will be used in somatic cell therapy by transplanting OC from Long Evans Agouti (LEA) rats into Long Evans Cinnamon (LEC) rats, a rat model of Wilson'sdiseaseandforgenetherapybyintroducingthewildtypegeneintoAHPCof LEC rats.